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Flexcube caters to the ‘new world’ wine market with polymer barrels

Melbourne based wine barrel innovator, Flexcube is looking to capitalise on an increase in demand for its products in the ‘new world’ wine regions of the United States and South America.

Flexcube manufactures patented oxygen-breathing polymer and oenological oak wine barrels which despite often being shunned by traditionalist wine makers, claim to last up to four times longer than the expensive traditional oak varieties, resulting in a significant reduction in operating costs, The Age reports.

The company’s chief executive, Peter Steer says that the increase in international demand could see foreign sales account for up to half of the company’s annual turnover. Flexcube has forecast growth of up to 40 percent for the 2014-15 financial year, representing a total of $5.2 million after tax providing that the company remains on target.

Steer says that although international demand for his patented barrels is highly encouraging, the fact that Flexcube manufactures its product in Australia means that the company has exceptionally high overheads.

"Our cost base is way too high," Steer told The Australian Financial Review. "I look at our industry and sometimes despair at the competition at global level."

Steer believes that it is these high overheads that often discourage Australian companies from entering the international marketplace.

Despite this, Steer says that together with the North American and South American markets, the company is also looking to expand to the more traditional wine regions of Europe.

"We always intended the company to service the international market, as Australia represents merely five per cent of the global barrel market," said Steer.

Over the past five years, Fexicube’s sales have grown by 20 percent annually. Annual sales for the company hit $2.45 million after tax in 2012-2013, and current sales are on track to reach $3.6 million after tax for the 2013-2014 financial year.

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